Announcement of Special Meeting of Development Partners of Maldives on July 16, 1984

HOLD FOR RELEASE World Bank 1818 H Street, N.W., Washington , D.C. 20433, U.S.A.• Telephone : (202 ) 477-1234 BANK NEWS RELEASE Contact: Pushpa N. Schwartz July 16, 1984 (202) 477-3651 MALDIVES: SPECIAL MEETING OF DEVELOPMENT PARTNERS The following announcement was issued today at the World Bank's European Office in Paris. A special meeting of development partners of Maldives was held in Paris on July 16, 1984, under the chairmanship of World Bank, to discuss the current economic situation and prospects of Maldives. The following countries were represented at the meeting: Australia, Japan, the Republic of Korea, Malaysia, Pakistan, Singapore, Sri Lanka, the United Kingdom, and the United States. Representatives of the Asian Development Bank, the Commonwealth Secreta~iat, the International Monetary Fund, the Islamic Development Bank, .the Saudi Fund for Developemnt, and the United Nations Development Programme also attended. The Abu Dhabi Fund for Arab Economic Development, France, Germany, India, and Indonesia attended as observers. The Maldives delegation was led by the Honorable Fathulla Jameel, Minister of Foreign Affairs. Maldives is a country of over 1,200 tiny and widely dispersed coral islands in the Indian Ocean, with a total land area of 298 square kilometers, an estimated population of 168,000 and an annual per capita income of about US$ 400. Over 50 percent of Maldivian GDP and virtually all export earnings arise from fisheries, shipping and tourism. A rapid increase in productive investments resulted in strong, export-led growth of employment and GDP during 1979-81. Since 1982, however, the country has faced severe economic difficulties arising from a drastic decline in export prices, as well as a loss of markets, for Maldivian products -- tuna fish, shipping services and tourism. The ~eting reviewed the current economic difficulties of Maldives, the Government's adjustment measures and the need for external financial assistance in the context of the short-term outlook. Participants observed that the recent economic troubles had caused major strains in the economy to which, however, the Government had responded with timely and well-considered measures, while at the same time maintaining its open economic policies and honoring all its commitments. The Government has been undertaking promising measures to mobilize domestic resources, maintain export earnings and contain expenditures; it has also acted in the affected sectors, maintaining a careful balance between the short- and the long-term recovery measures in the fisheries sector, and making rapid adjustments in existing and planned capacity in shipping and tourism.  -:2:- Reviewing the situation ahead, the f!M:!eting anticipated improved prospects in the medium term in view of ongoing adjustments in and outside Maldives. The participants therefore urged the Government to intensify its adjustment policies in the interim period, and assured it that, on their part, they would consider providing the necessary support to strengthen the Government's own efforts.